A New Breed of Practice

As small practice physicians are  forced to combat increasing overhead and shriveling reimbursement, we seem to be entering an era of medical practice Darwinism—survival of those that are most fit to operate in today’s severe and unforgiving healthcare environment.

In an attempt to survive and keep practice finances out of the red, many physicians fall into the trap of scheduling more patients in order to bill more and increase cash flow.

At first glance, this may appear to be a valid fix. Unfortunately, this is not always true. As you increase your patient load, you also increase the costs associated with seeing these patients and, after a point, efficiency and productivity levels drop. Even though you are billing more, you may not see an increase in profits. In fact, you may experience larger losses.

So if working harder isn’t the answer, what is? How can you manage operations so that your practice not only survives, but also thrives?

New and Innovative Practice Designs

Newly emerging practice models work smarter, not harder. They rely on basic business concepts such as supply and demand, operating concepts taken from manufacturing industry, and customer service practices taken from the hospitality industry, and on newly developing technology—all of which serve to streamline the delivery of healthcare and eliminate muda, a Japanese word that means non–value-added work that adds stress, is costly, and drains motivation.

This medical practice evolution has led to a new breed of medical practice design concepts. Although many of these emerging practice models were born out of the primary care setting, the following models have proven particularly effective in specialty practices and have been successfully adopted by some rheumatologists.

Micro-Practice: At the core of the medical micro-practice are the two key ideas of low overhead and high technology. In this practice setting, the physician is the sole provider of care and performs all administrative functions with no ancillary staff, leaving dramatically lower overhead than found in traditional practices that allot roughly 40% of income to pay staff salaries. The reduction in overhead, then, allows the physician to see fewer patients than before and leaves more time to be spent with each patient. The physician is able to do this on his own through the combination of high-quality patient-centered care with the extreme efficiency of using high technology and promoting patient responsibility.

Direct Practice: The direct medical practice (also known as personalized, retainer based, or concierge) is a rapidly growing trend that has been sweeping the United States since the late 1990s. These practices give patients the opportunity to pay a fixed annual fee to join the practice’s limited patient base in exchange for “premium medical services.” The theory behind the direct practice is that the physician can capture the same or higher revenue levels by charging a flat fee per patient and treating that patient in a way that promotes preventive healthcare and disease management through personalized patient education. The limited patient base allows physicians to spend more time with each individual patient to identify their needs and formulate a total health management plan that is custom fit to his or her lifestyle.

Open Access Practice: An open access practice (also known as advanced access) is based on the theory that one should do today’s work today and employs the concept of supply and demand to create a scheduling system that allows for more robust patient visits, increased compensation, higher net gains for clinics, more efficient clinic processes, and improved physician and patient satisfaction.

Implementing an open access model is hard work, but many open access physicians say it is well worth the effort and temporary inconvenience. Open access requires a complete overhaul of your scheduling system and that you work to reduce all backlog in your schedule. This may seem like a daunting task, but if you are willing to put the work into it, the process will move much faster than you think and, in the end, you will find yourself in a practice that operates more efficiently, effectively, and profitably.

How This Works in a Rheumatology Office

One common thread between all three of the models described is that they all rely heavily on efficient processes and personalized care.

Redesigning a rheumatology practice is not about simply selecting and implementing an “off-the-shelf” practice model. It is more about understanding the core concepts of the new model with which you are working and then molding a new practice model that will work for your unique circumstance and position.

In the October 2003 edition of Arthritis & Rheumatism, Timothy Harrington, MD, an early adapter of redesign principles, stated that, “If we are to serve our patients’ needs, we must embrace healthcare redesign and work more closely with other physician specialties to ensure the efficiency and effectiveness of chronic disease care, eliminate waste and duplication, improve patient adherence to long-term treatment, and provide measurable proof of optimal results.”¹

Dr. Harrington knows the benefits of practice redesign firsthand. After adopting some of the basic principles mentioned in this article using business and industrial concepts, he molded those concepts into a redesign that worked for his rheumatology practice. After doing this, Dr. Harrington was able to report a clear increase in efficiency and effectiveness of practice operations.

Dr. Harrington is not alone in his redesign successes. In the April 2004 edition of Arthritis & Rheumatism, Eric Newman, MD, also reported great improvement in access, patient satisfaction, and finances after the Department of Rheumatology at Geisinger Medical Center in Danville, Pa., implemented an advanced access system of scheduling.² More specifically, Dr. Newman’s department saw a great decrease in appointment cancellations, an increase in overall patient satisfaction, and an increase in patient satisfaction with the physician, accessibility, and the time it took to get an appointment. In addition, Dr. Newman reported an increase in total new referrals (including a 50% increase in new rheumatoid arthritis referrals within one year), and a more profitable fiscal year performance—all due, in great part, to the advanced access initiative.

Many physicians, faced with increasing debt and decreasing job satisfaction, have been forced to choose between abandoning their dream of private practice in a solo or small practice setting and making drastic changes in the core design of their practice. As these physicians reinvent their practice to provide care in a more efficient, effective, and satisfying way, we are beginning to see the basic model of medical practice slowly evolve.

Each of these practice models rests on the same basic principles of operation with highly effective and efficient patient-centered care that is supported by basic industry principles that are employed in successful businesses the world over. Each practice has unique needs, and what works for one may not work for the next. The key to successful practice redesign is to find the ideal combination that works for your situation. For more information on practice redesigning, contact Itara Barnes at (404) 633-3777 or [email protected].

References

1. Harrington, JT. A view of our future: The case for redesigning rheumatology practice. Arthritis Rheum. 2003;49:716–719.
2. Newman ED, Harrington TM, Olenginski TP, Perruquet JL, McKinley K. The rheumatologist can see you now: Successful implementation of an advanced access model in a rheumatology practice. Arthritis Rheum. 2004;51:253–257.